Defense says there will be talks with all three bidders; French must really be the winner; Lula rushed during dinner with Sarkozy on Sunday, angering the Air Force and leaving Minister Jobim in the middle of the crossfire.

In announcing earlier than expected Brazil’s selection of the French Rafale fighter, President Luiz Inácio Lula da Silva has caused embarrassment to his own government, which had to retreat yesterday by stating that the selection process is not yet completed and that the American F-18 and the Swedish Gripen are still in the running.

The joint statement issued on Monday said that Lula and French President Nicolas Sarkozy had "decided that Brazil and France are also strategic partners in the field of aviation," and announced "the decision" to enter into negotiations for the purchase.

In a [contradictory] statement issued Tuesday night, Defense Minister Nelson Jobim issued a denial, saying that "the selection process (...), is not yet finished, and will continue with negotiations with the three participants."

The expectation is that the deal will be concluded with France, but only if it offers a lower price for the Rafale, the most expensive of the competitors, and a more favorable interest rate. According to [reporting by] Folha de Sao Paulo, Lula rushed into dinner with Sarkozy on Sunday night and skipped several steps of the selection process, which angered the Air Force Command and left Jobim in the crossfire.

The minister refused to be interviewed on Monday to explain the announcement [in favor of Rafale] that is in his area of responsibility. Instead, Lula delegated the task to Foreign Minister Celso Amorim, who confirmed the terms of the joint statement: "This is a decision to open negotiations with [only] one supplier, [France].”

Now, the same favor has been extended to the other two competitors, Sweden and the United States. Faced with this confusion, the Air Force commander, Juniti Saito, met all day yesterday his aides. They said they are satisfied with the Rafale, but do not accept that the process was ended without notice and due process.

The Brazilian air force has not yet even submitted its evaluation of the three competing offers to the government.

At about 15:00 Brazilian time on Tuesday, Jobim, Saito and the team responsible for selecting the new fighter met to decide on a clarification that would not place the Ministry of Defence and the air force command at odds with the president’s office and the foreign ministry.

At the meeting of the Political Council, Jobim explained the selection process, and argued that "the procedures and deadlines" be followed exactly to avoid future legal challenges.

One significant point raised by Jobim is that the choice of the winning offer could not be announced without the approval of the National Defense Council, chaired by Lula and on which sit Jobim, Foreign Minister Amorim, other ministers as well as the Presidents of the Senate and House of Representatives.

In a separate meeting on Tuesday, Jobim told party leaders that the agreement between Brazil and France to buy 36 Rafales was not yet finalized, and that there were only "advanced talks" with the French. Asked if Jobim had confirmed the Rafale purchase, the President of the House, Michel Temer (PMDB-SP), was emphatic, saying that “On the contrary, he said it is still under negotiation."

Yesterday, military officials and diplomats declined to make any statement. According to rumors circulating in Brasilia, Lula made the decision virtually alone, and this could have disrupted negotiations on details such as prices and business conditions. Hence the about-turn.

The purchase of four Scorpene-class submarines, plus the technology to manufacture a national nuclear-powered submarine in Brazil, went through several phases of negotiation before the final contracts were signed.

One of the reasons cited for Lula’s rush to announce the deal is Sarkozy's intention to acquire ten KC-390 tanker-transport aircraft being developed by Brazil’s Embraer. The aircraft is in the design phase, with funding from the Brazilian air force, and a first foreign sale could help launch its potential on the international market.